Long-Term Debt and Capital

6 Months Ended

Jun. 30, 2011

Long-Term Debt and Capital

Note 8 – Long-Term Debt and Capital

In March 2011, the Federal Reserve completed its review of the Company’s capital plan in connection with the CCAR. Upon completion of the review, the Federal Reserve did not object to the Company’s capital plan as originally submitted in December 2010. As a result, during the first quarter of 2011, the Company completed a $1.0 billion common stock offering and a $1.0 billion senior debt offering, which pays 3.60% interest and is due in 2016. The Company subsequently used the proceeds from these offerings as well as from other available funds to repurchase, on March 30, 2011, $3.5 billion of Fixed Rate Cumulative Preferred Stock, Series C, and $1.4 billion of Fixed Rate Cumulative Preferred Stock, Series D that was issued to the U.S. Treasury under the TARP’s CPP. As a result of the repurchase of Series C and D preferred stock, the Company incurred a one-time non-cash charge to net income/(loss) available to common shareholders of $74 million during the first quarter of 2011, related to accelerating the outstanding discount accretion on the Series C and D preferred stock. The U.S. Treasury continues to hold warrants to purchase 11,891,280 shares of SunTrust common stock at an exercise price of $44.15 per share and 6,008,902 shares of SunTrust common stock at an exercise price of $33.70 per share.

The Company’s long-term debt increased from $13.6 billion at December 31, 2010 to $13.7 billion at June 30, 2011. The change was primarily as a result of the $1.0 billion senior debt offering described above, offset by $852 million subordinated debt that matured in the second quarter of 2011 and the repurchase of $220 million of fixed rate senior and junior subordinated notes that were due in 2011 and 2036.

As a result of the common stock offering, the Company’s common equity increased by $1.0 billion, net of issuance costs, and approximately 35 million new common shares were added to the Company’s outstanding common shares. Conversely, Consolidated Shareholders’ Equity decreased by $3.5 billion from December 31, 2010 primarily as a result of the repurchase of the Series C and D preferred stock, offset by the new common share issuance. The Company’s capital ratios as of June 30, 2011 and December 31, 2010 are noted below.

	June 30, 2011					December 31, 2010
(Dollars in millions)	Amount		Ratio			Amount		Ratio
SunTrust Banks, Inc.
Tier 1 common		$11,994		9.22	%		$10,737		8.08	%
Tier 1 capital		14,446		11.11			18,156		13.67
Total capital		18,230		14.01			21,967		16.54
Tier 1 leverage				8.92					10.94
SunTrust Bank
Tier 1 capital		$13,650		10.67	%		$13,120		10.05	%
Total capital		16,927		13.23			16,424		12.58
Tier 1 leverage				8.66					8.33